Housing 1998-2018: A Look At Markets Utterly Broken By The Crash

It’s not exactly usual for home values to be lower than they were two decades ago. One would expect 20 years of inflation alone would make home values higher by today. Not so for more than 180 cities in the US.

According to data from Zillow, out of approximately 13,014 cities tracked by the site, 16 of them have seen values of single-family homes fall by $50,000 or more from Jan. 1998 to Jan. 2018. And nine of these cities saw values drop 25% or more.

The housing bubble and crash that precipitated the Great Recession made a lasting impact on this country. For most real estate markets, the direct effects have subsided and home values have recovered. But not for all.

Shutterstock | Several housing markets outside Albuquerque suffered immensely and never recovered from the housing crash.

New Mexico

Over the years, Arizona became the Florida of the West, a major retirement hotspot. That helped boost housing prices and local economies, which other states took note of.

Before the bursting of the housing bubble, New Mexico probably seemed like the next Arizona. But it didn’t turn out that way, and several cities took a beating much worse than the majority of housing markets in the US.

For example, the population of Placitas, N.M. is largely composed of retirees and empty-nesters, with close to 83% of households having no children. Alto, NM tells a similar story. In Jan. 1998, their respective median home values were $432,000 and $385,500. By Jan. 2018, Placitas home values fell more than $57,000, down to $374,800, while Alto plummeted $70,100, down to $315,400.

Shutterstock | Towns throughout northern Wisconsin's lake country looked ideal for owning investment property. In 2008, that all fell to pieces within a matter of months.

Wisconsin

When thinking about the housing crash and places most affected, Wisconsin probably isn’t the first state that comes to mind. In reality, however, several Wisconsin real estate markets were the worst hit in the country.

City

Jan. 1998 Median Home Value

Jan. 2018 Median Home Value

20 Year Change (%)

20 Year Change ($)

Lake Tomahawk

$233,000

$166,800

-28.4%

-$66,200

Herbster

$201,500

$146,100

-27.5%

-$55,400

Webster

$192,000

$139,200

-27.5%

-$52,800

Bayfield

$233,000

$182,900

-21.5%

-$50,100

Rhinelander

$183,500

$133,800

-27.1%

-$49,700

The countries hit hardest were Oneida County, which includes Lake Tomahawk and Rhinelander; Bayfield County, Herbster and Herbster; and Burnett County, Webster. What's the connection?

Lake country.

Minnesota

Lakes are a common denominator for many of these cities. Bayfield, Herbster, Lake Tomahawk and Webster all are located in northern Wisconsin’s lake country. Minnesota lake country real estate suffered a similar fate, with some markets hemorrhaging hundreds of thousands of dollars in value.

City

Jan. 1998 Median Home Value

Jan. 2018 Median Home Value

20 Year Change (%)

20 Year Change ($)

East Gull Lake

$443,500

$327,200

-26.2%

-$116,300

Merrifield

$265,900

$182,900

-31.2%

-$83,000

Nisswa

$304,400

$236,600

-22.3%

-$67,800

Clitherall

$326,000

$266,600

-18.2%

-$59,400

Clitherall, East Gull Lake, Merrifield and Nisswa lay in Minnesota’s central lake region. The latter three are located outside Brainerd while the first is west, closer to Fergus Falls. Combined, these four cities lost over $320,000 in home value since 1998.

The devastation of lake country real estate, however, is not limited to Minnesota and Wisconsin.

Shutterstock | Lake Lyndon B. Johnson in Texas is home to Sunrise Beach Village. From 1998 to 2018, the median value of a single-family home in the town plummeted more than $100,000.

Idaho, Kentucky and Texas

In Idaho, the town McCall is centered on Payette Lake and has earned a reputation as a major tourist destination, especially for its Winter Carnival celebration held every year. From Jan. 1998 to Jan. 2018, however, the median home value in McCall fell nearly $70,000, almost a fifth of its original value.

Down south, that trend persists among the most heavily damaged markets. For example, Gilbertsville, Ky. sits along the Tennessee River, next to the Kentucky Dam and shores of the Cumberland River. What looked like a promising investment eventually imploded as the town’s single-family median home value plummeted from $193,900 in 1998 to a mere $142,200 by Jan. 2018.

In Texas, the town of Sunrise Beach, situated on Lake Lyndon B. Johnson outside Austin, suffered the biggest loss in single-family home values. Over the course of two decades, the median home value tumbled more than $120,000, from $481,400 in 1998 to $357,900 by the beginning of 2018.

Here's a full breakdown of the 20-year change for all 16 cities that lost $50,000 or more in value: